Alaska editorial: The value of Alaska mining operations

Posted: Sunday, December 10, 2006

The following editorial first appeared in the Fairbanks Daily News-Miner:

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Riding a robust commodities market, mining and exploration in Alaska is expected to hit a landmark this year, surpassing the $2 billion mark for the first time.

State senior mineral geologist David Szumigala, with the Division of Geological and Geophysical Surveys in Fairbanks, broke the news at the Yukon Geoscience Forum in Whitehorse, Yukon.

The total value mark has been over $1 billion for more than a decade, climbing to $1.85 in 2005. Figures won't be final until March or April, but looking at third-quarter figures and knowing development plans for some companies looking forward, Szumigala estimates $2 billion is a "conservative figure" for 2006. The figure includes dollars spent on development, exploration and production.

This is good news because it means Alaska is keeping pace in competition with the rest of the world as developing countries, especially China and India, push up demand for metals. It means Alaska continues to present itself as a place ripe for production. Yet we know our state is known for pushing to explore and produce in an environmentally responsible manner.

A 45 percent increase in exploration over 2005 and a boost in production at the Red Dog zinc mine near Kotzebue are chiefly responsible for this year's increase, Szumigala said. But more exploration is expected, and more production dollars will be flowing as the Pogo Mine near Delta ramps up to full production and other mines, such as Rock Creek near Nome and Kensington near Juneau, show their potential.

While often overshadowed by its big brothers, oil and gas, mineral exploration and production in Alaska should never be underestimated. This state has a wealth of mineral resources in not only gold, but also zinc, silver, copper and other metals. These billions of dollars mean state income, but more importantly they create high-paying careers for Alaskans, often in rural areas of the state.

Locations with stable governments and consistent regulatory demands will draw world mining interests while demand is high, Szumigala said.

World market watchers see India and China scratching for metals for some time to come in what is being called a "super cycle" in the always cyclic minerals markets. Alaska's leaders should take note, and see that our state remains an attractive draw for responsible and profitable mineral development in the future.

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